Home Builder Hovnanian Posts Disappointing Results
December 08 2016 - 11:20AM
Dow Jones News
Home builder Hovnanian Enterprises Inc., which has struggled
under a massive debt load, said earnings declined in the latest
period even though revenue rose, hurt by climbing expenses.
The results missed Wall Street expectations, and shares fell
2.9% to $2.38 in morning trading in New York.
Hovnanian has faced maturing public debt from land purchases and
acquisitions during the boom years. The company increased its use
of land bank financing and joint ventures and exited four
underperforming markets in 2016, which Chief Executive Ara
Hovnanian said was a "challenging year" for the company.
But the company said it would start to actively seek out land
investment opportunities, which should lead to higher levels of
profitability in the future, Mr. Hovnanian said.
Over all, net income was $22.3 million, or 14 cents a share,
compared with $25.5 million, or 17 cents a share, in the prior-year
period. Analysts polled by Thomson Reuters expected 13 cents a
share.
Revenue rose 16% to $805.1 million, as analysts expected $802.3
million.
Total home-building expenses rose to $719.9 million from $612.9
million in the prior-year period. U.S. home builders have faced
growing concerns over rising land and labor costs and an tepid
housing recovery.
Luxury home builder Toll Brothers Inc. earlier this week
reported double-digit revenue growth in its fourth-quarter results
and projected a strong performance going into 2017 despite
softening in some markets.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
December 08, 2016 11:05 ET (16:05 GMT)
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